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Chirac wades into the battle for Euronext

Jacques Chirac waded into the battle for Euronext on Tuesday by saying a 'Franco-German solution' with Deutsche BÃ¶rse would be better than the recently agreed merger between the Paris-based stock exchange operator and the New York Stock Exchange.

The French president's comments come amid growing anxiety about the $10bn (â‚¬7.8bn) takeover among Euronext's large shareholders and users in Paris, and could encourage Deutsche BÃ¶rse, the NYSE's German rival, to counter-bid. Some Euronext shareholders have already criticised the 'sudden rush' to cement the deal with NYSE.

France has no veto over a merger by Euronext, a Netherlands-based company operating the Paris, Amsterdam, Brussels and Lisbon bourses and London's Liffe futures market. However, political opposition could create headaches for the heavily regulated stock exchange operator.

Buoyed by Chirac's remarks, Deutsche BÃ¶rse chief executive Reto Francioni and chairman Kurt Viermetz are on a lobbying trip to Paris today to sound out ways Deutsche BÃ¶rse can make its offer 'more attractive' to shareholders without making significant changes from what has been offered up until now, a person familiar with the matter said.

Some of the French banks that might play a role in the long-running exchange-consolidation saga are less concerned about having a European outcome. Rather, they want to ensure that if NYSE Group, and Euronext merge, they can rest assured that US corporate regulation will stay out of Europe, according to a person familiar with the matter.

Chirac said he would regret an all-European market not being the solution that was 'adopted in the end.' But he made clear that his priority was to keep jobs in Paris, even if it meant tying the knot with the Americans. And he acknowledged that he had only 'very limited ways to intervene' in the deal.

Merkel was even more circumspect, explaining that governments like those in France and Germany could not exert influence over merging companies, even if she were 'of the opinion that it is good to build up strong economic units within Europe.'